Efforts to reduce regional inequalities in the UK have challenged policymakers for over a century. In parallel, our ambitions for readying a globally competitive workforce to drive forward new and developing industries will always be a strategic priority; such is the future of work.
A more aligned focus on these perennials – skills and regional growth – will allow us to dig a richer compost into our regions, feeding productive potential and vigorous growth, based on local economic strengths.
The new economy
We face headwinds driven by automation, the advent of AI, cost-of-living challenges and geopolitical tensions. There are also workforce issues that the UK has been harbouring for too long, compounded by Brexit and the challenges presented by the pandemic.
Our view at KPMG is that the regions and nations of the UK are uniquely placed to maximise the opportunities of the new economy. This is where many of our natural advantages lie, and where our industries of the future are located.
The Humber’s net zero hub, the compound semiconductor industry in south-east Wales, and graphene research collaborations in Manchester are beacons of our emerging strengths.
There are also opportunities to reduce regional inequalities by supporting further investment in skills. Targeted development in the health and care workforce would have direct benefits to health outcomes locally, and free up senior and managerial professionals.
Pipelines of specialist talent are needed to support these regional clusters and national strengths, with government, the education sector and business working in partnership to develop and entrench them.
Prioritising people and places
KPMG’s 2022 report with Demos, Movers and Stayers, set out the challenges for retaining talent, focusing on ex-industrial Mansfield and coastal Blyth.
Simply put, people move when their mobility is enhanced by the quality or level of their education or training, and they are more likely to leave behind the place they are from. Many people, however, may not be as mobile, making their prospects in the place they call home more important.
The Office for National Statistics estimates that the proportion of jobs at risk from automation varies from 7.4 per cent to 35 per cent, and the regions of the UK and many of our coastal areas are the most vulnerable to these shifts.
People too can be left behind. A focus from government, education providers and business on lifelong learning, upskilling and reskilling to support new industries is critical, and must incorporate a geographic lens.
Direction of policy
There is a consensus across the political spectrum that the UK has a productivity challenge, with long-standing regional variations that must be tackled.
Strong and localised provision of education and skills is the thread that runs through the UK government’s Levelling Up white paper, the Welsh government’s Innovation Strategy and the Scottish government’s National Strategy for Economic Transformation.
Skills provision is at the centre of developments in England’s devolution agenda and new investment zones. These provide test beds for new approaches, and innovation. The UK government’s focus on technical education and commitments on lifelong learning signal further recognition of the new horizons for work, as well as the need to keep on learning throughout our working lives. A national strategy with a combined focus on the skills required for the jobs of the 2030s and 2040s, the gaps and shortages that currently (and will) exist in the workforce, and the local and regional opportunity areas of the UK, would be a welcome next step.
Our vantage point
At KPMG, our heritage is in the regions, and our perspective is informed by our 20 locations across the UK. We work with every sector of the economy and our workforce serves the communities and local economies in which they live.
We have helped combined authorities meet their ambitions, supported energy clusters in net zero transitions, and unlocked regeneration and growth with local leaders. KPMG is also supporting the education sector as it prepares its roadmap towards lifelong learning; this is a real opportunity to rethink how learning provision aligns with the needs of the UK economy and its workforce. KPMG’s Movers and Stayers report focused on ex-industrial Mansfield and the challenges of retaining talent
Place-based partnerships are at the heart of our approach to regional prosperity. We target areas of greatest need, working with our charity partners, businesses and local governments to address the needs unique to them.
We want a fair and inclusive transition to the new world of work. Our community-focused approach targets social mobility cold spots. With the Talent Foundry, our WorkReady programme educated more than 19,000 students between 2013 and 2022 in digital and green skills. Our partnership with the University of Cambridge focuses on research-backed solutions to support employees’ mental well-being.
Variety and vibrancy
As the growing season approaches, our perennials return. They need to be carefully tended to flourish and will require support. Our priority must be unlocking and developing talent to support our regional strengths; this will bring vibrancy and vigour to our local economies, and ultimately secure sustainable growth.